Capital Currents: FCC broadcast spectrum incentive auctions

I’ve written about several aspects of the FCC “incentive auctions” of broadcast spectrum, but I have not laid out the big picture – the statutory requirements and the positions of the stakeholders. Now that the first round of comments on the FCC’s proposal have been submitted, I can summarize some of the positions.

The goals of the Middle Class Tax Relief and Job Creation Act of 2012 include: 1) The transfer of at least 120 MHz of spectrum for mobile broadband use; and 2) The generation of enough revenues to pay broadcaster relocation costs, the funding of a national broadband public safety network, as well as support for deficit reduction. It would involve clearing DTV broadcast operations from at least off-air channels 38 through 51 (614-698 MHz), and probably more channels below 614 MHz.

More specifically, the law directs the FCC to: 1) Conduct a reverse auction in which broadcast licensees may submit bids to give up their spectrum; 2) Repack the remaining broadcasters to free up additional spectrum in the UHF band; and 3) Conduct a forward auction of newly available spectrum to allow for licensed broadband wireless use.

Among the stakeholders, first and foremost are the broadcasters.

But, in fact, there are differing views within the broadcast industry. For example, there is the Expanding Opportunities for Broadcasters Coalition, which claims to represent 39 television stations concentrated in the country’s largest markets. Those broadcasters are actively interested in selling their spectrum, if the price is right, and they have specific views on how the reverse auction should be structured. And they want AT&T and Verizon to be allowed to participate in the forward auction to maximize proceeds.

There are the low-power TV broadcasters that will likely have problems finding new channels after the repacking. Currently, there are roughly twice as many LPTV licenses as high-power broadcast licenses.

There are broadcasters (and cable programmers) that use wireless microphones (WMs), many of which now operate in the 600 MHz range and are concerned about having enough spectrum after the repacking. At the largest sporting events and at political conventions, there are typically more than 120 WMs in use, often simultaneously. But the FCC has proposed to scrap the two channels that were reserved for WMs near Channel 37.

There are those broadcasters, like members of the Mobile Content Venture (operating with the “Dyle” brand name), that support the delivery of mobile content using the ATSC standard for digital mobile transmission on broadcast channels. Today, a 6 MHz channel can support both the transmission of HD programming to fixed TV receivers and simultaneously the delivery of a lowerresolution signal to handheld mobile receivers. If the FCC requires that two broadcasters share a single 6 MHz channel after the repacking, there will be less opportunity for mobile broadcasts.

All of the broadcasters have a concern about the repacking and resulting coverage areas and interference. They want to have the same coverage area and serve the same population after repacking as before repacking. But the FCC has suggested several ways to interpret the statutory requirement that it preserve population served, such as preserving total population served, but not necessarily the same population previously served by each station.

Another issue related to repacking and interference is the need for coordination with Canadian and Mexican TV stations.

International coordination can take years.

Educational broadcasters cannot participate in the reverse auction, but they will be affected by the repacking. Not only do they want to keep the same coverage area, but they want to make sure their costs for changing transmitter frequencies are reimbursed.

Similarly, Dish and DirecTV will have to change receiver frequencies, and they want their costs reimbursed.

There is a concern about the specific band plan that the FCC proposed. Not only the broadcasters, but also the cell phone operators (AT&T, Verizon and T-Mobile) and equipment suppliers (Intel and Qualcomm), all support an alternative band plan that would minimize interference and equipment costs compared to the FCC’s plan.

I previously wrote about the radio astronomers that use channel 37. They don’t want to be forced to move to a different band. But they may be forced to share their channel with unlicensed users.

And, finally, there are the “white spaces” proponents of unlicensed operations on broadcast frequencies. Like the low-power TV broadcasters, they see the available spectrum for their operations being squeezed.

They have proposed some changes to the FCC’s white spaces technical rules that would give them access to more spectrum, but these changes would increase the possibility of interference to licensed broadcasters, wireless microphones and radio astronomers.

This entire process is enormously complex, with many conflicting goals. It remains to be seen how long it will take the FCC to adopt specific rules for the auctions. And it remains to be seen whether enough auction revenues will be generated to pay off the broadcasters that are willing to give up their channels, pay all the repacking costs and still fund a national broadband public safety network.